December 7, 2021, Draft
   • CASTF Subgroup
    • Gordon Hay, FCAS, MAAA, CPCU – Nebraska
    • Miriam Fisk, FCAS, FCAS, MAAA, ASA – Texas
    • Tom Botsko, ACAS – Ohio
   • NAIC Staf
    • Robin Marcotte
    • Kris DeFrain, FCAS, MAAA, CPCU
   COPLFR’s May 2019 Letter 
   to CASTF and SAPWG
   • Asserted ambiguity in the accounting/reporting 
    requirements for affiliated retroactive reinsurance 
    agreements that meet the requirements for 
    “Prospective Reinsurance Accounting” treatment
   • Attributed materially diferent presentations in 
    Schedule P by diferent companies to that ambiguity
   • Recommended that this asserted ambiguity be 
    addressed by improved clarity in SSAP 62R and the 
    Annual Statement Instructions, “given that industry 
    Schedule P is utilized for risk-based capital (RBC) 
    purposes as well as other purposes”
 SSAP 62R
     P&C Reinsurance 
     Accounting (SSAP 62R)
         Deposit Accounting (paragraphs 40-41)
         Deposit Accounting (paragraphs 40-41)
         • Used when the agreement does not transfer risk
         • Paragraph 37 requires harsher version of deposit accounting to be used for affiliated retroactive 
         reinsurance involving a gain in surplus to the cedant – does not allow the deposit asset to be admitted
         Prospective Reinsurance Accounting (paragraphs 30-32)
         Prospective Reinsurance Accounting (paragraphs 30-32)
         • Net premium = Gross premium – Ceded premium
         • Net loss and LAE = Gross loss and LAE – Ceded loss and LAE
         Retroactive Reinsurance Accounting (paragraphs 33-39)
         Retroactive Reinsurance Accounting (paragraphs 33-39)
         • Ceding entity: loss and LAE reserves Exhibits & Schedules do not take credit for retroactive reinsurance
         • Assuming entity: loss and LAE reserves Exhibits & Schedules exclude assumed retroactive reinsurance
         • Balance sheet write-in amounts: 
         Amount of retroactive reinsurance ceded (contra-liability) or assumed (liability)
         Special surplus from retroactive reinsurance
         • Income statement write-in: Retroactive reinsurance gain/loss included under Other Income
    Retroactive Reinsurance Accounting 
    Exceptions (paragraph 36)
    Exceptions “accounted for as prospective 
    Exceptions “accounted for as prospective 
    reinsurance agreements unless otherwise 
    reinsurance agreements unless otherwise 
    provided” in SSAP 62R
    provided” in SSAP 62R
    a. Structured settlement annuities
    b. Novations
    c. Commutations
    d. Intercompany reinsurance agreements with no surplus gain
    e. Property/casualty run-of agreements